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Microsoft shares rallied Thursday after the company’s quarterly results beat Wall Street’s expectations.
Several analysts raised their price targets for the stock and Morgan Stanley called it one of the company’s strongest quarters in recent memory.
Microsoft reiterated its plan to spend $80 billion on infrastructure in fiscal 2025.
Microsoft (MSFT) shares surged Thursday after the company posted what Morgan Stanley called “one of their strongest quarters in recent memory,” on growth fueled by demand for cloud computing and AI.
Microsoft shares were up nearly 9% in recent trading to about $430, pushing them into positive territory for 2025.
Morgan Stanley raised its price target to $482 from $472 following the results, which beat Wall Street’s revenue expectations across all segments. “We remain strong buyers of this GenAI winner,” the analysts said. “Bottom-line, while the macro presents uncertainty, Microsoft appears poised to yield on GenAI investments which should support share gains and more durable growth ahead.”
Bank of America maintained a $515 target, and noted earlier-than-expected returns on Microsoft’s infrastructure investments. During Microsoft’s earnings call Wednesday, CFO Amy Hood reiterated the company’s plan to spend $80 billion on infrastructure in fiscal 2025. Hood said demand for AI has continued to grow, to the point Microsoft expects “to have some AI capacity constraints beyond June.”
Meanwhile, Jefferies boosted its target to a more bullish $550 and Wedbush moved to $515, both from $475 previously. “We are laser focused on the AI piece of this MSFT story,” Wedbush said. “All metrics were ahead of expectations which give us added confidence in the AI Revolution bull thesis.”
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